Oil rebounds in Asia but Italy deadlock weighs

A woman waits beside a taxi fuelling up at a Sinopec gas station in Beijing. AFP FILE PHOTO

SINGAPORE — Oil prices rebounded in Asia Wednesday but analysts said sentiment remains hobbled by fears that deadlock in the Italian elections could derail the eurozone’s nascent recovery.

Just as the eurozone’s woes appeared to be easing, the results of the Italian vote, which reflected strong public sentiment against austerity measures, spooked global financial markets.

New York’s main contract, light sweet crude for delivery in April climbed 19 cents to $92.81 a barrel while Brent North Sea crude for April delivery gained 18 cents to $112.89. Both contracts fell in overnight trade.

“The prospect for a hung parliament in Italy and concern that the country may need new elections continue to roil the markets,” said Phillip Futures in a market commentary.

“The vote result has stoked fears that the country’s politicians would be unable to form a government strong enough to continue the effective reforms.”

Results of Sunday’s vote point to a centre-left majority in the lower house, but no clear majority in the Senate, which could result in political instability.

Italy, the third biggest economy in the eurozone after Germany and France and a founding member of the euro, is struggling with rising unemployment and massive debts.